When life gives you pomegranates … make strategy.
The Incredible & True Origin Story of POM Wonderful
Back in 1987, the fantastically entrepreneurial Stewart and Lydia Resnik were looking to expand their almond (Blue Diamond) and pistachio (Wonderful) businesses.
So they purchased 18,000 acres of farmland in California.
Among the groves of almonds and pistachios were 130 acres of pomegranate trees. Suddenly, the Resniks were the largest pomegranate growers in the United States.
And what was the problem they needed to solve?
The Resniks didn’t yet know the best way to turn their pomegranates into giant piles of cash.
Of course, there were other challenges.
Back then, pomegranates were not well known in the US. Incredibly popular in places like the Mediterranean and the Middle East, but very few people ate them here.
Also, they’re not exactly easy to eat. The entire pomegranate is technically edible, but only the red, pulpy goop surrounding the seeds is any good.
That means you have to cut the pomegranate open and scoop out the seeds, which takes time … and it’s messy. The seeds are a bit sticky and they can stain your hands and clothes.
In other words, pomegranates are not a quick snack for busy people on the go or a fun snack for toddlers on a long car ride.
The Resniks had 130 acres of a fruit that had almost no mental availability, very little physical availability … and was functionally somewhat difficult to enjoy.
They could’ve done almost anything to change that — from setting up roadside stands to buying space at farmers markets across the country to forming the American Pomegranate Growers Advisory Council to establishing exclusive pomegranate partnerships with higher-end retailers like Whole Foods.
However, the guiding policy for all their brands was and is: Create demand for a premium product that consumers value.
So the Resniks did their homework instead.
It turns out that pomegranates have been associated with health for a very long time. In ancient Greece, for example, they were a symbol of rebirth, eternal life and fertility.
The Resniks wondered if pomegranates offered any actual health benefits, so they commissioned their own scientific study which found that pomegranate juice has more antioxidants than red wine.
Further studies suggested it might help lower blood pressure and reduce the risk of prostate cancer.
Now they were onto something. They decided to start a pomegranate juice brand.
The juice market is incredibly crowded with all sorts of brands winking in and out of existence. However, the Resniks had a few things going for them.
They had a meaningfully differentiated product — a juice that is good for you with health claims backed by research.* This was the added consumer value they were looking for.
They had a first-mover competitive advantage. As the largest grower of pomegranates in the US, they had an enormous supply. As a privately owned company, they could move very quickly.
They made the very smart decision to sell 100% pomegranate juice.
Most juice companies take a primary fruit juice — blackberry, say — and dilute it with less expensive juices like apple or pear.
But if health benefits were the added value for customers — and if the Resniks wanted to sell a premium product at a premium price — diluting those benefits with cheap apple juice wasn’t going to fly.
They created an entirely new category — a healthy, chilled juice marketed entirely at adults.
They built a strong brand with distinctive assets — the bottle, the logo and, of course, the color of the juice itself.
POM Wonderful was born.
The kernel of good strategy begins with a diagnosis of the actual problem and the underlying causes of the problem.
For the Resniks it was: We have a lot of pomegranates. No one knows what pomegranates are, and they’re kind of a pain in the ass.
Then comes a guiding policy, the overall approach to overcoming the actual problems. The Resniks’ guiding policy was: Create a premium product that consumers will value so we can charge more for it.
You’ll also need a set of coherent actions. Among other things, the Resniks funded scientific research, leaned into vertical integration, sold 100% juice, created a new category and built a strong brand.
Without the solid foundation of good strategy, POM Wonderful does not fall into place.
So what does that mean for you?
When we first meet with potential clients, we always start with a question: What is the business problem you need to solve? The real business problem.
The answer to this question is critically important because it guides overall strategy and everything that follows.
And our first job is to help you wrangle the complexity of your business problem into a narrative that’s true, easy to understand and actionable.
So if you’re launching a new product and you need a lot of attention very quickly, fantastic. Give us a call.
If you need to effectively drive efficient growth, great. Let’s chat.
If you’re in charge of an established brand that has been snoozing for a while, and it’s time to awaken a sleeping giant, awesome. You know where to find us.
See you next time.
Sources!
Except for a few fun facts about pomegranates, we leaned heavily on “Good Strategy, Bad Strategy” by Richard Rumelt. You’ll find loads of case studies across industries with examples of what to do and what not to do. It’s wickedly brilliant, wildly useful and we recommend it to everyone.
Rumelt has a newer book out called “The Crux: How Leaders Become Strategists,” which is next on our reading list.
*In 2016, the FTC and a US federal court ordered POM to stop making health claims in their advertising. POM had claimed that pomegranate juice prevents heart disease, cancer, diabetes, and erectile dysfunction. So maybe they pushed it a little far.